YACT: Leasing Cars?

[WobbleWobble]

I'm looking at cars and I can't find a scenario where I might lease a car? I'm 20 and will be paying for this myself. Yes, I can afford it as I don't work a minimum wage job

I graduated last summer from college so I qualify for grad rebates. I'm not sure if I'd get rebates on a lease?

Anyways, I imagine myself wanting to change cars every 3-4 years. I'd be taking out a loan regardless, but have a few thousand saved for a down payment. My parents are willing to co-sign as well.

I have my eyes on an RX8 and yes I can afford the lease payments, but the more practical side of me says I should maybe finance a Mazda3 or something.

These are all ideas I have. Specific cars I have yet to decide, but I want to get a general idea of what I want to do.

Oh, I also don't drive that much so the milage limitation shouldn't be an issue.

Can anyone shed more light on my situation and give me some advice or suggestions?

Thanks!

 

[StageLeft]

Hmm

I say don't lease. It's a terrible thing to do financially.

 

[WobbleWobble]

Yeah, I saw that thread. That's what got me thinking of leasing and I've seen other leasing threads as well.

 

[HappyPuppy]

Don't lease, even if you plan on changing cars every 3 or 4 years. You will have no equity in it. By buying, with a decent downpayment, the car will be worth enough for a tradein/downpayment after 3 or 4 years.

Leasing cars is one of the stupidest things you can do. It will eat you alive unless you are extremely lucky.

 

[StageLeft]

Originally posted by: WobbleWobble
Yeah, I saw that thread. That's what got me thinking of leasing and I've seen other leasing threads as well.

So you want to lease after reading that? :Q

 

[HappyPuppy]

Originally posted by: Skoorb

Originally posted by: WobbleWobble
Yeah, I saw that thread. That's what got me thinking of leasing and I've seen other leasing threads as well.

So you want to lease after reading that? :Q

:Q:Q:Q:Q:Q:Q:Q:Q

 

[WobbleWobble]

I think his situation is different?

 

[Vic]

Buy. It gives you much more control and flexibility. With low interest rates and the fact that the RX8 should hold its value somewhat well, you should never have a point where you have any serious negative equity (unless you pay too much for the car to begin with).

edit: and HappyPuppy is right. Even though a car depreciates in value, it is still possible to build equity in one. I pocketed > $10k in equity when I sold my last car, and that was after a little more than 5 years of ownership. With a lease, you're lucky if you don't have to pay them when you give it back.
And you have to have a car anyway right?

 

[WobbleWobble]

What I don't understand is if leasing is that bad, why do people for non-business reasons do it? There must be some reasons that lead people to leasing a car.

 

[StageLeft]

Originally posted by: WobbleWobble
I think his situation is different?

Well the situation with a lease is that you're limited on miles, flexibility, and YOU are paying for the depreciation of that car, most of which will occur after the first 3-4 years. Then repeat. I'd recommend reading a book or two on personal financing (since most people don't know anything about it - not saying you don't though), and then see if you're still comfortable with leasing.

 

[StageLeft]

Originally posted by: WobbleWobble
What I don't understand is if leasing is that bad, why do people for non-business reasons do it? There must be some reasons that lead people to leasing a car.

You realize the average American household has 9k in credit card debt? The average 40 year old hardly has any net worth, etc.? I would not take a single lesson from the average person in regards to financing. Would you take health advice from the average person? Nooooooo. Same here.

 

[kermalou]

lets see....i drive a 40k car, that i could have never afforded any other way but leasing.

my end cost will be about 17k after three years of driving the car and I have no worries of having to find a buyer and stuff....

it all depends on your priorities.

i forgot, also I get about 12k miles a year on my lease and an under my mileage about 4k.

if i drove more, then leasing would make no sense, but i barely drive that far..

 

[kermalou]

Originally posted by: WobbleWobble
What I don't understand is if leasing is that bad, why do people for non-business reasons do it? There must be some reasons that lead people to leasing a car.

to have the latest greatest car.

 

[WobbleWobble]

Well... I'm Canadian

But I understand what you're getting at. I'm at the point where I'm really starting to grow up, financially. Even though I rack hundreds of dollars a month on my CC, it's always paid off by the month. I want to start right, but I know if I want a car in the near future I have to start with a little bit of debt

 

[StageLeft]

Originally posted by: kermalou
lets see....i drive a 40k car, that i could have never afforded any other way but leasing.

my end cost will be about 17k after three years of driving the car and I have no worries of having to find a buyer and stuff....

it all depends on your priorities.

i forgot, also I get about 12k miles a year on my lease and an under my mileage about 4k.

if i drove more, then leasing would make no sense, but i barely drive that far..

Oh God, you pay $500/month to RENT a vehicle that you can't even drive much.

 

[beatle]

I guess I'm a bit paranoid in regards to debt. While I could technically afford to lease a car like that, I hate the fact that I'm just throwing my money away. I don't know if I'll even buy a new car for years to come. I'd rather buy a 3 year old used car with low miles that has already taken the depreciation hit. Besides, at the 3-4 year mark, most people get tired of their cars and sell / trade them in, so there's a glut of those model years on the used car lots. More selection, more competition, lower prices. That's just me though.

 

[WobbleWobble]

I'm 20 so having a nice car is higher on my priorities list...

 

[StageLeft]

Originally posted by: WobbleWobble
Well... I'm Canadian

But I understand what you're getting at. I'm at the point where I'm really starting to grow up, financially. Even though I rack hundreds of dollars a month on my CC, it's always paid off by the month. I want to start right, but I know if I want a car in the near future I have to start with a little bit of debt

You really don't have to start with much. Buying new is a bad idea from a money standpoint. It's nice to have the new car smell and you have to weigh that with responsibility, but depreciation is hardest at the beginning. Remember you can always upgrade your vehicle later. You're 20. How many 35 year olds do you see driving rx8s? It's because reality has set in and they are probably paying off debts incurred from when they were younger.

 

[WobbleWobble]

The whole throwing money away idea is getting to me too, but I still would like to have a nice (or at least decent which is why I'm looking at the Mazda3 as well) car.

If I wanted to keep my money, I have a 91 Tercel that drives fine with no problems. I anticipate that it won't have any major problems either, I just want something a bit less embarassing to go out in.

Yes, image is a factor. I know it's bad, but it's not something that takes over my life.

 

[WobbleWobble]

To me, buying new isn't a bad idea anyways. I can usually get a grad rebate which can be from $500-1000 CDN. I'd also get lower financing rate. Plus all the benefits of a new car.

That's why I'm looking at new.

 

[kermalou]

Originally posted by: Skoorb

Originally posted by: kermalou
lets see....i drive a 40k car, that i could have never afforded any other way but leasing.

my end cost will be about 17k after three years of driving the car and I have no worries of having to find a buyer and stuff....

it all depends on your priorities.

i forgot, also I get about 12k miles a year on my lease and an under my mileage about 4k.

if i drove more, then leasing would make no sense, but i barely drive that far..

Oh God, you pay $500/month to RENT a vehicle that you can't even drive much.

skoorb,

about 380/month with taxes, and I enjoy my drive. but I get sick of things real quick and change my mind often, so leasing for me makes great sense. I can't wait, my lease is up in Sept. and am already salivating at the thought of a new car.

I dont have to worry about anything, as opposed to my last car which haunted me till the day I sold it for chump change. also, everything is under warranty and I haven't had to spend a dime on anything, not that anything has gone wrong (knocking on wood).

 

[StageLeft]

Originally posted by: WobbleWobble
The whole throwing money away idea is getting to me too, but I still would like to have a nice (or at least decent which is why I'm looking at the Mazda3 as well) car.

If I wanted to keep my money, I have a 91 Tercel that drives fine with no problems. I anticipate that it won't have any major problems either, I just want something a bit less embarassing to go out in.

Yes, image is a factor. I know it's bad, but it's not something that takes over my life.

Well how about this: In US funds $15k will get you a barebones Mazda 3, or a 2002 Maxima SE. The latter car is not only more prestigious (mazda 3 is afterall just an econobox), but you won't be upside on it for years on end as the depreciation destroys you). If you want image I would definitely recommend spending the same amount of money on a slightly used, much nicer, car. You sell that mazda 3 in 18 months and you'll take a bath in it, but in the maxima you can break even pretty much right off the bat, since initial depreciation has tempered its price.

I can usually get a grad rebate which can be from $500-1000 CDN. I'd also get lower financing rate. Plus all the benefits of a new car

There are benefits, but money isn't one of them, regardless of any financing or grad rebates.

 

[cyclistca]

You also need to consider the other cost of ownership outside the cost of the car. First one that comes to mind is insurace. I see you in live in BC. An RX8 is going to be much more to insure then a Mazda 3.

Yes, I can afford it as I don't work a minimum wage job

Hmm BC, do you live in Surrey and have an interest in hydroponics?

 

[WobbleWobble]

I was also debating that as well, buying a better used car. I have the Acura 3.2 CL and TL in mind. IS300 is also there, but people say it's silling spending over 30K Canadian on a used car.

I'd really like a used MB or BMW, but I know maintenance will hurt me.

 

[WobbleWobble]

I'm in Burnaby and work in IT. I have no green in either of my thumbs

True, insurance is a factor. And it is something I am aware and concerned about. Well, of course I'm always concerned about money!